Stocks wrap up worst year in a decade

Wall Street closed out a dismal, turbulent year for stocks on a bright note Monday but still finished 2018 with the worst showing in a decade.

After setting a series of records through the late summer and early fall, major U.S. indexes fell sharply after early October, leaving them all in the red for the year.

The S&P 500 index, the market’s main benchmark, finished the year with a loss of 6.2 percent. The last time the index fell for the year was in 2008 during the financial crisis. The S&P 500 also posted tiny losses in 2011 and 2015, but eked out small gains in both years once dividends were included.

Major indexes in Europe also ended 2018 in the red. The CAC 40 of France finished the year down 11 percent. Britain’s FTSE 100 lost 12.5 percent. Germany’s DAX ended the year in a bear market, down 22 percent from a high in January and 18 percent from the start of the year.

“This has really been a challenging year for investors,” said Jeff Kravetz, regional investment strategist at U.S. Bank Wealth Management. “This was really the year that market volatility returned with a vengeance.”

Wall Street started 2018 strong, buoyed by a growing economy and corporate profits. Stocks climbed to new highs early, shook off a sudden, steep drop by spring and rode a wave of tax-cut-juiced corporate earnings growth to another all-time high by September. Then the jitters set in.

The autumn sell-off knocked the benchmark S&P 500 index into a correction, or a drop of 10 percent from its all-time high, for the second time in nine months. A Christmas Eve plunge brought it briefly into bear market territory, or a drop of 20 percent from its peak, before closing just short of the threshold that would have meant the end of the market’s nearly 10-year bull market run.

“For markets to move higher next year, we’re going to have to resolve those issues,” Kravetz said.

On Monday, the S&P 500 index rose 21.11 points, or 0.9 percent, to 2,506.85. The Dow gained 265.06 points, or 1.2 percent, to 23,327.46. The Nasdaq added 50.76 points, or 0.8 percent, to 6,635.28. The Russell 2000 index of smaller-company stocks picked up 10.64 points, or 0.8 percent, to 1,348.56.

Bond prices rose. The yield on the 10-year Treasury note fell to 2.68 percent from 2.73 percent late Friday. The yield started off the year at 2.41 percent.

Health care stocks paved the way for Monday’s modest gains. The sector ended the year with a 4.7 percent increase, to lead all other sectors in the S&P 500. Utilities were the only other sector to eke out an annual gain, adding 0.5 percent.